fascinating to get more details about the united headline. in the meantime thanks for watching "power lunch." . >> "closing bell" starts right now. ♪ hi, everybody. welcome to the closing bell. i'm kelly evans at the new york stock exchange. >> i'm bill griffeth. very busy day. >> yeah. >> we have a lot to cover over the next couple of hours, financials for one. they've been struggling to stay positive for the year, but once red hot trade seems to have lost its luster. we have a debate on whether earnings can reignite that rally coming you have. those earnings begin in ernest tomorrow. >> one prominent hedge fund manager is giving billions back because he believes markets are over valued. >> also, gold hit highest level since november earlier. goldman's held of commodities research joins us exclusively to discuss whether this rally still has legs. talk with jeff currie among

other things about gold in a bit. begin with the meeting between president trump and nato secretary, due to kick off momentarily just ahead of this afternoon's conference. kayla tow at the white house with more on that. >> reporter: you are right. it is expected to kick off momentary and we hope to get a picture of the two leaders inside at some point in the near future. ahead of that news conference that begins in about an hour, it is the first face-to-face meeting and was highly anticipated already, not only because of the president's prior criticism of the institution but also because of his push to increase defense spending. some of that was expected to trickle through to nato despite the fact that he had called the institution obsolete. obviously the topic that is now going to rise to the fore is relations with russia. does the u.s.'s approach to russia jibe with that of nato's? nato countries are a buffer zone between the u.s., canada and western europe to russia, so it is important they're all on the same page. it appears that president trump is taunting the russians a bit

with his approval of montenegro in expanding nato which he approved yesterday despite the fact it's been under consideration since 2010. you saw secretary of state tillerson and russian counterpart sergei lavrov a few moments ago. they spoke in an even-keeled manner about u.s. and russian relations. when you drilled into the substance of what they said, it could not have been more different when it came to syria. listen. >> our view is that the reign of the assad family is coming to an end. they have, again, brought this on themselves. >> the future of syria has to be determined by the syrians themselves without any exceptions. >> reporter: so you can see that there were very different approaches in terms of whether assad and that regime should stay in power. lavrov going on to say that there have been no examples of the u.s. successfully removing a

dictator from a country. so certainly a shot across the bow from russia in that press conference. according to national security council officials, they said that the topics discussed by president trump and the secretary general of nato would be the president's iron-clad commitment to the organization, the afghanistan policy. they are undergoing a review of that policy right now and they seek to wrap it up swiftly. and then the encouragement of allies to increase defense spending. vice president pence and secretary mattis talked about the importance of nato but said that the european allies in particular need to increase their financial commitment. we will see what comes up, but you can be sure, guys, there will be questions about russia in that press conference. >> all right. kayla, thank you. no doubt we'll hear from you again in the near future. thank you, at the white house. by the way, when president trump welcomes the secretary general to the white house, they were expecting a tape play back of

that greeting and that could come up any moment. so we'll be maybe interrupting here in the next few minutes. >> and they'll have a press conference. there's a shot of -- in the next hour of the show. that's all coming up. in the meantime, take a look at four key safety trades, we are watching these while the secretary of state was speaking with sergei lavrov. how about the ten year, the vix, gold and dollars reacting to comments out of the news conference today. >> the safety trade exert edit self early on and pulled back a little bit as the conference went on. joining "closing bell" exchange to talk about the diplomacy going on, rob morgan from sandy spring bank with us at post nine, steven sarge guilfoyle, and our own rick santelli is in chicago at the cme as well. sarge, you called them the four hoersmen. the fourth for you is utilities, not necessarily the dollar. but they have been acting more outspoken lately. what do you think is going on

here? >> well, it is where traders, investors go when they get a little bit nervous. it is real easy right now to justify taking a profit. i'm doing it myself. it is a lot harder to justify putting new capital to work in some of the areas that you've done well in over the last four or five months. materials, financials, they're all -- all of the trump trades are coming off because, let's face it, if we get the growth we thought we were going to get, it is going to take longer. might take another year, who knows? now they're attracting, gold is attracting investment. treasuries are attracting investment. the stocks doing well are the bond proxies, utilities and real estate investment type of stock. >> it is interesting you say that. would you put new money at capital. a ceo is returning a $1.25 billi $1.25 billion to investors. here is an example of what he was saying. these valuations can only be

assumed by cyclically high corporate margins exist, and a risk free rate that stays near all-time lows. he says we're skeptical of all of the above. rob, what would you say to people wary of putting money in this market when a guy like that is returning to investors? >> kelly, i think from a pe standard the market, it is tough to argue that it is cheap. but i think by other metrics if you look at interest rates and where they are right now, bonds certainly aren't going to give stocks any competition. i think warren buffett made that point a couple of weeks ago. also, earnings growth is going to be up double digits this year. if stocks are fairly valued -- and i'm not saying they're cheap but i think they're fairly valued. stocks in the long run follow earnings growth and i think we'll see positive news there this year. >> meanwhile, rick, the yield on the ten-year continues lower, 229 now. i mean what are you thinking is going to happen here if we get down to that level you've been watching there carefully of 227? >> you know, if we get a day and

a week and a month that all coordinate with regard to a close below a significant second goal level, and in this case that being 227, many round 225 because it is a little more pleasing, but it should be rather significant. not just for what it is saying about maybe the global economy and investors at large, but what it is also saying potentially about central banks. peter bookfar, one of the friends of cnbc, has been writing about that a lot. what he is basically saying is things are changing. maybe our fed is ahead of the game with respect spoke an exit and trying to normalize if that's possible in a timely fashion, but other central banks will be coming along and the fungibility of what stimulus is left is a finite number. the clock is ticking. with respect to equities, listen, if you are looking for reasons to be nervous about equities, the reason i would concentrate the most on would be volatility. i'm not a big vix follower, but one stable aspect of what's been

going on with equity since november is a lack of price volatility and to some extent option volatility. i would monitor that. i think the worst fundamental if you are holding a long position in equity markets would be a big drop in rates. i think that signal would be taken very negatively by the equity markets. >> kind of reminds of the recent past. sarge, yields down 9% and metals have kind of gotten hit. is that all feeding into this narrative we are talking about where is it because they're growth sensitive or is it maybe because there's a sense of something is not going to come through on infrastructure here? >> i think it is more that there's not going to be a follow through on infrastructure. healthcare reform, tax reform, infrastructure build, repatriation, these are all things that we invested in in november and december. guess what? your gaeg to get another chance this november and december. that game is still going to be played. so that leaves us, like rob was saying, with high pe ratios. and if earnings don't help us

fill out that xxl shirt, well, we're going to have to take money off the table. i think -- i don't think any trader in the game doesn't see that already. >> but, rob, are people getting another chance at the financials? maybe some of the infrastructure plays here if they thought they missed out the first time around? >> i think so. i think we have kind of a news vacuum here. whenever we're not in earnings season, it is a news vacuum. as you were pointing out, bill, that starts -- >> tomorrow we get the banks out. >> big way tomorrow. so i think that news is going to be pretty good for several weeks, and that's going to help carry the day. >> all right. let's take a pause here, gentlemen. the tape coming in from the white house of the president greeting the secretary general for nato and, of course, this will be another critical meeting, kelly, where president trump during the campaign was saying he felt like nato was irrelevant these days, but he's here now today to tell him that the u.s. unconditionally supports the nato alliance. >> lately he's been telling people he has some very good news that he wants to talk about

on the nato front. so, yes, we'll look for -- i think more importantly probably is are there going to be specific changes. as we saw secretary proposed a number of things that could change in that relationship. >> thank you very much, see you in a while. >> and how much the u.s. contributes to defense of some of the nato allies, especially in western europe and whether they should pay for that. you will have the news conference when they get under way. >> yu. united airline shares struggling again today after the ceo spoke out about the way a passenger was removed from a plane this weekend. let's get to phil with the latest. >> reporter: kelly, the latest is united airlines trying to make aamends for what happened sunday night now announced it will reimburse all of the passengers on flight 3411. that was the flight from chicago to louieville where dr. david dow was forcibly dragged off the plane. all of the passengers will be reimbursed for the cost of their ticket. united announcing that within the last couple of minutes. this video continues to generate

a lot of headlines and a lot of buzz around the world. earlier today oscar munoz doing his firms tv interview, once again apologized saying this will never happen again. he did, however, say he is not going to resign. he is intent on fixing the situation, fixing the reputation of united airlines, including addressi addressing-really how slow they were in apologizing for what happened. >> my first reaction to most issues is to get the facts and circumstances, and my initial words fell short of truly expressing what we were feeling. that's something that i've learned from. the expression of apology and specific to the folks i mentioned before is an important part of a conversation like this because, again, that shame and embarrassment was pretty palpable for me and for a lot of

our family. >> reporter: and during that interview, oscar munoz again apologized to dr. david dow and his family. he also says that the airline will no longer use law enforcement to remove passengers who have been bumped from tliets. remember, united is promising a full review of policies when it comes to over booking flights as well as bumping passengers, how they handle that situation. they are expecting to have that review done by april 30th. guys, real quick update on dr. david dow. last we heard, and this was several hours ago, in fact earlier this morning, he was still in the hospital according to his representatives. we have not heard an update since then, nor have we heard anything other than the statement he released yesterday afternoon where he expressed thanks for those who have offered support from around the world. so it will be interesting to see if and when we finally do hear from that passenger. back to you guys. >> yeah. there's been some mixed reporting. i wasn't sure if you could help

clarify. i've seen people referred to the amount of fees you can reimburse someone when they are bumped as capped at 1350. others say that simply is kind of a federal standard and the airlines are free to pay as much above that as they want. what is your understanding of how this works? >> reporter: they're free to pay above that. they are free to pay above that. look, if an airline comes to you and says, we'll give you $5,000 to get off of this flight, the federal government is not going to tell them they can't do that. the $1350 is part of the federal regulations that were laid out as part of, hey, the airline also have to offer you compensation up to $1,350. now, if an airline decides they want to go above that, there's certainly nothing stopping them. >> yeah. you would think now perhaps they will be eager to do that instead of paying out every passenger. >> you never know. hey, phil, before you go i'm going to do a little ceo mash up here. i was reading, jeff bezos put out annual letter to amazon shareholders today, and in it he talked about concept of day one which for him is that's the

period when companies are still entrepreneurial and flexible. he said in there, there are many ways to center a business. you can be competitor focus, technology focused, bus nuss model focused and there are more. in his view he says, obsessive customer focus is by far the most protective of day one vitality. >> sure. >> i just wonder what jeff bezos, how he might have handled a situation like that and what he would think of this -- the overall concept of over booking a flight that does lead to people being bumped from airline seats they bought to begin with? >> reporter: well, keep in mind jeff bezos essentially created his little niche of the world. he created what amazon has become so strong in terms of its business. they have that area basically dominated. oscar munoz, all of the other airline executives, they came into an industry where these rules were already set in place. so it is a far different

challenge that they are facing in terms of saying, okay, we want to be customer focused. listen, every ceo i interview, bill, in the airline industry says we're focusing on customer service, taking care of the customer is number one. that said, they all have the practice of overselling and bumping passengers. so there is a rub there. you have to accept that there is only so far that they can go in terms of 100% it's all about the passenger when, in fact, they will continue to oversell these flights and occasionally bump passengers. >> i can't wait for my next trip. thank you, phil. appreciate it. >> thank you, phil. see you later. >> reporter: you bet. >> 45 minutes to go. dow is down 62 points, s&p down 9, nasdaq down 29, russ else down 16. >> you can't be customer focused and hide behind the rules at the same time. just my two cents. president trump and the head of nato are expected to hold a joint news conference after the meeting at the white house. that gets under way the next

hour. we will bring it to you live. talk about market implications with our panel of experts coming up. >> gold hitting its highest level since november today. goldman sachs head of commodity research tells us whether investors should buy the safe haven asset here. you're watching cnbc, first in world business worldwide. >> the bond report sponsored by >> the bond report sponsored by pimco. that's the power of and. the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses.

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we have breaking news from president trump, and steve liesman, i know all investors want to hear this. >> yes. three areas of big news from the president in an interview with the "wall street journal." first he says the u.s. dollar is getting too strong. goes on to say a strong dollar will ultimately hurt the u.s. it makes it very hard to compete. he goes on to say that china, it will not be labelled a currency manipulator, and the report due this month says china has manipulated currency for months and doesn't want to do it because it hurts in talks with north korea. finally, and i don't know if it is bigger of the three elements here, he says he is undecided on renominating fed chair janet yellen. he says he likes and respects

yellen. it is too early to decide, he says. we haven't heard anything from the president about the fed chair since the election. he's been quiet about that. he was critical of her during the campaign. we're also hearing him say -- trump says he prefers low interest rate, a low interest rate policy. so those things coming from the president. you can see summary action in the bond market, some reaction in the ten-year note, you can see as well as reaction in the dollar which did in fact weaken on the statements from the president that he says a strong dollar makes it very hard for the u.s. to compete. he says the dollar is getting zoo trong. kelly. >> yes. a hint perhaps to keep her around he likes the low rate policy, steve. yeah. >> i think what is interesting here is if things go the way they're going, this gradual removal of accommodation, this gradual interest rate rises, a gradual plan to reduce the balance sheet as well as chugging along 2% growth and a low unemployment rate, you know, what is not to like?

why would you necessarily upset that cart when so much else is in flux with the administration here? >> all right. as if we needed more news today. steve, thanks very much. let's bring jeff currie in, head of commodities research at goldman. we were here to talk about all of the commodities that you are watching right now, but let me just start here. is the dollar too strong? do you agree with the president? >> well, if you look at -- i think gold is a nice segue into this. is the fundamental drivers of the dollar in gold versus, let's call it the geopolitical drivers of gold and the dollar, the two of them have been driven more by geopolitical situation in the last several weeks than by the underlying fundamentals. in fact, i would argue when you look at gold right now it's been elevated by the geopolitical unrests. we are focused on tomahawks, north korea being the big two drivers of gold recently. this created a big wedge between

the fundamentals, which would suggest gold price is closer to 1200 and gold price sitting around 1277. >> index got as high as 103 in the initial trump trade euphoria. we are well off those levels now. you are a commodities guy. most are priced in dollars. you hear the u.s. president saying i want the dollar going lo lower, you're like bring it on. if you're bullish on commodities broadly speaking, that's great news, right? >> actually, if there's anything that i would argue is biggest development in commodities recently is the break down in correlation between the dollar and commodities. >> like oil? >> yes. let's go over what is driving that. we would argue that it is the lack of uncertainty in long-term oil prices. there's more confidence in long-term oil prices than we've seen in 15 years. why? >> right, everyone has decided on the same number? >> the reason why is because there's not uncertainty in the technology. we know that shale is the dominant resource base, so now the debate is about what does it

cost to extract the shale. now, why does that make the lack of correlation between the dollar and oil become reality? it has to do with the fact that the big sovereigns like sawed ya' arabia and opec have a high probability of hitting their budget. before, let's says they planned for 20 and got 40, they would have 20 to put down on the pressure. owe they planned for 85 and got 50, they're boroughing and pressure on the dollar. now they plan for 50 and get around 51, they do not borough or save and reduce the correlation between not only oil and the dollar, but oil equities, oil credit and all of the other different asset classes. >> go ahead. >> are all commodities launching, are they destined to go higher in this environment? is that what you are getting at? >> the cyclical commodities we're quite positive on, primarily oil and the base complex. because the core of our view is really where we are in the business cycle, a strong

underlying cyclical economy begins to stress the ability for the system to deliver the commodity. in fact, there's an important point here. while the rest of the markets are focused on the idea of peak sentiment, the growth numbers have been phenomenal, how can they get better? >> exact reply. >> we're not worried about it in commodities. why? because commodities depend on activity level, not growth rate, meaning the level of demand above the level of supply distresses the system. not a question about growth rates. >> u.s. yield is getting hurlt. is that all temporary infrastructure issue, are those supposed to rebound as well in your view? >> we think when we look at the farris complex two drivers going on there. one, we had a substantial -- >> did you stay -- >> steel, iron, ore. >> not a ferris wheel. >> yes. they're made out of ferrous. the two big dynamics are about

china slowing down, but the other one is we had substantial destocking. remember, these markets rallied more than any other market at the beginning of the year. >> true, they were ripping and now correcting a little bit. jeff, thank you so much. jeff currie with goldman. phil, what now? >> reporter: kelly, no sooner did i tell you what, just about ten minutes ago, we have not heard from david dow or his representatives today. we have heard in a sense. there has been a motion filed in kook county, according to reuters, in a court filing david dow's representatives filed an emergency bill of discovery against united airlines. he is seeking to preserve surveillance videos, cockpit voice recordings, passenger and crew list, incident reports, other materials related to what happened on sunday night. he says it is crucial and essential that the materials be preserved or else he could face serious prejudice. he is also asking the city of chicago, which operates o'hare international airport, to also preserve any materials related

to what happened on sunday night. guys, here you go. this is the beginning of the lawyers for david dow collecting information and essentially setting up a potential lawsuit against the airline and/or the city of chicago. >> we learned yesterday he hired not one but two law firms and he hired a pr firm to represent him. >> correct. >> where do you think it is going? i mean it is pretty clear what the strategy is going to be, right? >> reporter: yep. and this is the first step you take. if you are going to sue -- and who knows? he may settle with these guys. he may not sue them. but if you are going to sue, you want to have all of that information preserved. >> all right. thanks, phil. phil lebow as it gets curiouser and curiouser. 30 minutes left in the trading session. we were down 98 at the low. we've been coming off the low since then. >> coming up, live to the white house for president trump's joint news conference with nato secretary general. >> up next though, blackberry

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. check out a few movers on wall street today. time inc. and media group meredith corps trading lower, with the offer for time reportedly falling short of expectations. reuters says time has been looking to sell itself for more than $20 a share, but sources

tell cnbc it is evaluating late-stage interest from multiple partners. neither company is commenting at the time. the market is making the comment. "time" is down 3% today with "meredith" down 2 1/4. blackberry has been awarded about $815 million from qualcomm in an arbitration case. that is for overpayments in royalties blackberry made to qualcomm between the years 2010 and 2015. qualcomm says it disagrees with the decision, but this deal is binding and it cannot be challenged. so qualcomm will be writing a check for a little over $814 million. >> lawsuits with qualcomm these days, dealing with apple of course. >> right, and apple and other things going on there. >> blackberry reinventing itself with a car in any case. time for an update. hi, contessa. >> reporter: hi there. here is what is happening. the u.n. agency for children

says the boko haram has increased the use of children as suicide bombers. 27 children have been used in suicide attacks in four african countries by the islamist group in the first three months of this year. almost all of them were girls. the wife of the gunman in the pulse nightclub massacre in orlando has pled not guilty to charges of aiding and abetting her husband and obstruction of justice. noor salman appeared before a judge in federal court. new york city's ban on trans fat in restaurants may be working according to a new study from yale university. it says there's been a larger drop in hospitalization for heart attack and stroke in areas that restrict the use of trans fatty acids. and this is a really stunning break in the case. you tie your shoes as firmly as possible and soon they come undone. why? california berkley scientists think they have figured it out. they found the force of a foot striking the ground stretches and then relaxes the knot while

a second force caused by the leg swinging acts on the ends of the laces like an invesible hand. i am just here to give you the final results of this physics research that will change life as we know it. >> i hope this was done at the high school level, because if anybody funded this -- >> it is a magical time we live in. we now know the identity of deep throat and we now know why shoelaces come untied. >> yes. >> that is unbelievable. thank you. >> i will say the new elastic ones in my running shoes hold a better tie. >> really? >> i don't untie and tie them every time. i slip my foot in. >> let's see what cal berkley says about that. see you later, contessa. >> thank you. >> we head to the close with 30 minutes left the in the trading session here. the dow holding steady with a decline of about 56 points. as kelly mentioned we are waiting for the joint news conference between president trump and the secretary general of nato. we will bring it to you live from the white house when it is

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well, as we just saw when president trump talks the currency markets listen, right? >> big way. we have to talk about rates in a minute. >> turns out americans listen as well, and many people are in turn talking with their wallets. according to new cnbc survey that steve liesman is going to tell us about. >> reporter: remember all of the stuff people boycotted or spent at nordstrom because they removed ivanka's products and all of the donations to the aclu in the wake of the immigration? we wondered in our all-american survey how much was going on with americans and we found a lot of it. in fact, when we asked did you make a purchase or make a contribution after the election, because of the election of president trump, 37% of the public says they've done one of these two things. 11% mailed purchases, either boycotted or made a purchase because of the election. 17% made a contribution, either to a political organization or to charitable one.

9% did both. moving on, to say is this pro trump or anti-trump, 15% did it because it was a pro-trump action, 21% bass it was an anti-trump action. let's look at some of the sub groups and who did what. first of all, the west much more likely to be political activists as we say here with the dollar sign versus the south or midwest. lower incomes, higher incomes, more likely to be activists. of course, clinton supporters versus trump supporters. guys, it is an interesting dynamic all of the sudden with the election of donald trump we've been activated to express our political believes more and more through our wallet. >> that's kind of weird in a way, steve. i mean because you would think -- i mean have we gotten so wealthy as a society we can afford to be discretionary about purchases in that way? >> kelly, can i push back on your question a little bit? maybe it is not so wealthy. maybe we have gotten so partisan as a society that we see every action we take as being one that

expresses our political believes, be it how we vote in the ballot bock or how we spend our money at the mall. >> credit card debt is up, you know. >> maybe,s must be an expression of confidence, you know, one party has is or doesn't for example. it is odd. you feel the purchases on some level are what you need to go about your day-to-day life and it shouldn't be so affect. >> it is the way people can express themselves though, you know. >> i don't think it is every purchase they make, it is just when things get politically charged as they've been, when spending at nordstrom becomes an act of showing political support, or after the immigration ban millions were contributed to the aclu, everybody thinks there's a role for their money for the political debate right now. >> do numbers count on -- because the retail sale real school week because it's been diverted to political campaigns. >> they might. i have to figure out how that's handled.

i bet by the time i get to my desk some of the brilliant economists who watch this show will have e-mailed me. >> i bet. 20 minutes left in the trading session here. the dow holding steady. boy, is it ever. down about 53 points. has a rift between russia and the u.s. widens over syria, secretary of state tillerson met with russian president putin and spoke to the press afterwards. the latest on the rise intensions coming up. >> and president trump has been quite critical of nato. he is now meeting with the alliance's secretary general, jens stoelt enberg. there's a shot of the white house because in half an hour both leaders will emerge and hold a press conference. we will bring it to you live. stay with us.

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. with tensions rising between the two countries, secretary of state tillerson held a news conference in moscow today following his meeting with russian president vladimir putin. michelle cruz cabrera, our chief international correspondent watched it carefully. what an interesting dynamic we saw in that news conference, right? >> reporter: sure was, bill. tensions between the u.s. and russia were on full display at the news conference because it wasn't just rex tillerson there but also russian foreign

minister sergei lavrov who started out on what sounded like an optimistic note. then the u.s. secretary of state tillerson said this. >> i express the view that the current state of u.s./russia relations is at a low point. there is a low level of trust between our two countries. the world's two foremost nuclear pou powers cannot have this kind of relationship. >> as they sat there, they disagreed with the future of the leader of syria, bashar al assad. tillerson repeated it is without assad. lavrov said if he goes, who replaced him. scolded the u.s. about libya and iraq. the two didn't agree that the chemical attack from last week which started this whole crisis even occurred. >> translator: there were no signs that would support the statement, the allegations that chemical agents were used there at all. >> the perspective from the united states, supported by the facts that we have, are

conclusive, that the recent chemical weapons attack carried out in syria was planned and it was directed and executed by syrian regime forces. >> reporter: we didn't actually see video of tillerson meeting with putin, but the fact putin met with him at all was a good sign because there were questions it would happen. >> that was surprising because it seemed until the meeting happened it might not. yet i can't believe that the russians would deny that chemical attack took place. is this their strategy, what they're going to fall back on? >> reporter: yes. they've been saying, well, we think if there were chemical weapons there they were being storld by the terrorists, by isis, by rebels trying to topple the government, and maybe there was an attack or the bombs to the airport where they were kept are what caused the chemical weapons. you know, they've come up with various different stories, but, yes, totally alternate realities for the two sides. >> i will be interested to see

as days progress where we see the meeting a thawing, the fact they're talking is a good sign, or whether it exacerbated our tensions here. we will see. >> yeah, we will see. >> thank you, michelle. >> thank you. we have about 15 minutes to go. dow is down 70 points, kind of bumping around the low levels here. the s&p is down 10. by the way, the transports are down 151 points today, east bay all of this as saudi arabia was talking about extending the opec agreement. oils turned lower for example, nasdaq is down 33, russell down 18. we have to talk, after president trump gave the interview to the journal where he talked about pushing down the dollar. >> the tenl year is getting close to that level now. something to keep an eye on. meantime, big banks start rolling out earnings tomorrow. financial stocks retreated in recent weeks, so should you bet on the banks right now? a bull/bear debate coming up. you do all this research

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liberty mutual insurance. . all right. you want volatility? you got it. look at the dollar index right now. it had traded a little higher early on during the news conference, in sort of a safety trade during the news conference with the secretary of state tillerson. then we get word that president trump has given an interview to the "wall street journal" where

he thinks the dollar is too strong right now, they need to keep rates low and the dollar index tanked. it is now down about half a percent. >> this playing out, the president saying he favors a low rate environment admittedly, and that's having an effect, of course, not just on the dollar but also on the level of the ten-year which went below 227. the reason we mention that is rick would tell you that's where we closed at the end of 2015. we worked way above that level, all the way up to about 2.6%, maybe even a little above that, and now back to 2.266%. >> you know, rick said if you want to go in broad strokes, go to 225. hang around, we may still do that, right? >> yeah, and the oldest on the eve of the banks reporting in the morning. >> speaking of which, the financial sector has been negative so far, this after seeing a big run up immediately following the election last november. >> tomorrow results from cite, jp morgan before the bell. joining us to discuss this is

david wells who is bull issue on the sector and eric walters. david, let's begin with you. especially with the sharp down moves in interest rates, why do you like the banks? is it a broad basket here, all of them? >> well, i think the reason to own them is still there. you have a good economy, credit is good. the prime has moved up 75 bases points in the last year. i think, you know, today was a tough day. i was watching your programming around noon time and, thank goodness, my windows were bolted shut. but having said that, i think the negative sentiment we have now on this space is kind of almost, you know, the exact opposite of what we had two months ago or a month ago. so i think we've got a buying opportunity as we come back of somewhere in the middle. but the fundamentals are good. the valuations are reasonable for a lot of the companies. i think you just have to work past this world that's coming to an end against scenario we have

with rates and the economy. >> eric, we're posing you as a bear, but i think cautious is a better word for this right now, right? >> yes, that's correct. i would say we're sort of more mixed on this space with -- we've been more cautious on the view that multiples would contract. having done that, we're now looking at stories where we think there's some driver of earnings that isn't macro driven. >> okay. let's be specific here. let's get one stock that you guys disagree on. david, you like bank of america, eric you don't. david, you first. >> well, the stock's about 140 a book, about 11 times next year areas earnings, maybe a little less. it is obviously a big bank with a very strong commercial and residential franchise, so it represents america as a whole. i think america as a whole is getting better. the unemployment rate you see, we go through the numbers all the time. with that valuation i think you're in good shape. the different denied will go back, the buy backs will go up,

capital returns will increase. so 22, $23 here, i think in one or two years it is up 20, 25%. >> eric? >> yeah, i guess i don't disagree with some of the points. i just think it is much more discussion about valuation. i would argue that there's very little that i see that will incrementally change the earnings trajectory. i think the street has already discounted in things like higher rates and an improving economy. my question is -- >> i was going to say, eric -- >> about the return profile -- >> yes. so on gold, which i know you are also caution on, it would seem to be more well-liked for doing all of those right things. is it still a valuation issue with you? >> well, i think on goldman, for example, this quarter i'm about 10% below the street in terms of estimates. i think people are just a little bit exuberant still about the earnings capacity in this environment. this environment isn't bad, it just isn't accelerating and

that's what you need to get higher earnings for several of these companies. >> david, you like goldman? >> well, i think i would say to eric -- i mean i would agree a month ago, maybe a month and a half ago, a lot of these companies looked fully valued but they've all come down pretty hard here in the last month or in the last couple of weeks. i think that has changed the profile of the opportunity. so it is not just valuation. i think, yes, there is maybe to get better but you say it about a lot of industries, and the question now are the valuations reasonable. you have the fed that wants to move rates up and when rates move up, it will move up and the revenues will improve and it will give them more flexibility and we'll see a better company. >> i don't know if you heard. the president said a little while ago, we're finding -- he told the "wall street journal" he prefers a lee interest rate environment and policy. so, you know, you have a fed that may be marching toward higher rates but a president that won't be pleased about

that. eric, what do you think that will do to the financials then? >> well, i think the key thing is really the fed's path. i think the fed has laid out their path pretty clearly. so i think we're going to get this steady march towards higher rates which, undoubtedly, is constructive for this space. it is just that i would argue it is already reflected in estimates. so to get higher performance from here what you're really arguing for is multiple extension. i just don't see the driver of that outside of something that improves the broader macro. >> all right. gentlemen, thank you. good discussion. david ellison, eric wasserman on the bank which begin earnings reports tomorrow. what a day. we will have the cloings countdown in a moment here. >> then after the bell, president trump critical of nato on the campaign trail as the company's chief executive is wrapping up a meeting with nato secretary general jens stoltenberg. their joint news conference is minutes away. we will bring it to you live. you're watching cnbc, first in

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♪ ♪ you have access to the right information at the right moment. ♪ ♪ and when you filter out the noise, it's easy to turn your vision into action. ♪ ♪ it's your trade. e*trade. start trading today at etrade.com the closing bell is sponsored by -- about 2 1/2 minutes left in the trading session here with the dow down 65 points. you want volatility, we have it today. let's start with the dollar index, after word got out that the president just told the "wall street journal" he thinks the dollar is too strong right now, look what the dollar index

did. so when the dollar index goes down that much, what do you think goes up? how about gold, which has been rising anyway lately. as soon as the dxy started lower, the price of gold went higher. we are at 1283 on that right now. look at the ten-year. this is a number that rick santelli has been pounding the table on for a while now, taking us down to 226 today. this takes us below the level where we closed in the end of 2015. that's not a misprint. i didn't say 2016. 2015. if we go much lower beyond this, you could see much lower rates coming our way here. we will see. vix went up again today, not by examination we saw yesterday but a healthy gain, at 1589 right now, a gain of 5 to 6% today. through it all, bob, the stock market didn't do a lot again. >> so what has happened is geopolitical risk has now come back in. it was not for a long timing, now it is an issue. concerns of north korea moving

the market, then the president came out and talked about the dollar getting too strong. one thing i'm not sure everybody preshts is the president also said he likes the low rates policy for the federal reserve many. we have been debating down here how much that moves the ten year, whether it would be weak dollar or i like the low rate policy. >> and his indecision about whether to reappoint janet yellen as well at this point. >> yeah. >> which at any rate that's to be expected. it is still early right now. >> i like the low rate policy. that's really dovish. i think it was the primary mover of the ten-year. a lot gets mixed in together. i also want to know we had a tough day in a lot of the commodities market. iron ore has been down almost the entire month. there's been concerns about weaker demand in china and saw some of the big names today. when you start moving 5% on a name like one of the biggest steel companies in the world, it gets people's notice. that's been weak for a while. the ipo market we're watching carefully. this is a big latin american

retailer, disappointing last year, $18 closure. >> and all of the bank earnings start tomorrow as well. that should be very interesting. stay tuned for our live coverage of the news conference, president trump and the secretary general of nato getting underway momentarily on the second hour of the closing bell with kelly evans. see you later, kelly. >> thank you, bill. welcome to "the closing bell" everybody. i'm kelly evans. on the left of your screen is a shot where shortly we will be seeing the president with the secretary general of nato. that news conference set to begin any moment now. on the right-hand of course is how we're finishing the session today on wall street, the dow dropping 62 points on the bell. that's about a third of a percent to 2589. the s&p 500 down to 2344. the nasdaq down a half a percent so doing weaker than the other

average, but the worst performer is russell 2000 down, a drop of 1300 points. the dow trmts dropping 164 points. a lot of developments in the last hour or so. we will get to the movement in the dollar and rates on an interview the president gave with the "wall street journal" in a moment as we await this news conference with the president and the secretary general of nato. we will bring it to you live the moment it begins. kayla is actually at the white house with a preview of what we might expect to hear these leaders say, especially the president now that we've seen the details of what secretary ross might be up to with nato. >> reporter: yes. kelly, a lot of irons in the fire for this administration when it comes to trade, when it comes to the economy and when it comes to security outside the u.s. borders. to that end, this is the very first meeting the president and the secretary general of nato are holding, despite the fact that president trump criticized this institution repeatedly on the campaign trail. he called it obsolete.

he criticized the ally members who he said were not contributing enough, that they were chronically underinvesting in this institution. but this meeting we saw them shake hands. it appeared cordial, and officials from the national security council said it wasn't expected to be an awkward conversation between president trump and secretary general stoltenberg. today we know that the two men shared a phone call in february during which president trump agreed that he would go to brussels, his first foreign trip, in late may to visit nato. so that is an important optics move by the president, and certainly we'll see what these two leaders say and whether they have an update on relations with russia which are coming into clear focus this afternoon, kelly. >> kayla, since it will be a news conference he will take questions which could be on anything, right? we saw obviously a contentious and uncomfortable press conference with the secretary of state and foreign minister lavrov in russia. so that, obviously with the situation in north korea, sean

spicer, anything could come up, right? >> reporter: well, kelly, the contours of trump's foreign policy are just coming together, and there's been some confusion about exactly what the strategy is in north korea, in russia, in syria, so we are looking for any clarity from the president on that and what role nato will play in that. the u.s. represents 68% of nato's defense spending so the u.s. has an out size role in nato and nato will be an important alliance between the u.s. because it is a buffer zone between the u.s. and russia. so there will be questions. we expect a couple of questions from american media, a couple of questions from foreign media, and we will see what the exact content of those questions is, kelly, in a few moments. >> reporter: just entering the room behind you with steve bannon, of course the president telling the "new york post" today, it wasn't exactly a ringing endorsement of bannon who has been at odds with other parts of the white house like gary kohn. he could have picked that moment to say he fully was behind, you know, the man often seen as the

economic nationalist on the team and he did not. that's why we'll have to see if he gets questions about a possible shakeup there, uncomfortably with the people in the room as well. >> yeah, that is definitely something that is brewing within this white house, kelly. for now we'll wrap it up and sit down and listen. >> all right. here is the president with the secretary general of nato, jens stoltenberg. >> thank you. secretary general stoltenberg, a pleasure to welcome you to the white house, especially at such an important moment in our great alliance. i also want to acknowledge the great work being done by our secretary of state rex tillerson to strengthen the nato alliance as well as the secretary's trim to moscow to promote the security interests of the united states. he has done a terrific job.

[ inaudible ]. 68 years ago this month not far from where we are gathered today, president harry truman spoke at the society of the north atlantic trade. in the nearly 70 decades since he spoke those words, the nato alliance has been the bulwark of international peace and security. nato allies defeeted communism and liberated the captive nations of the cold war. they secured the longest period of unbroken peace that europe has ever known. this partnership rooted out on so many different things, but our common security is always number one and our common

devotion to human dignity and freedom. since 1949 the nato member states have more than doubled, increasing from 12 to 28. on monday i signed to approve the 29th, the country of montenegro. in the coming months and years [ inaudible ] with all of our nato allies to enhance this partnership and to adapt to the challenges of the future of which there will be many. with all of the challenges, including migration and terrorism. we must also work together to resolve the disaster currently taking place in syria. we're grateful for the support of nato members and partners in their condemnation of assad's

murderous attack using the most horrible weapons. the vicious killer of innocent civilians with chemical weapons, including the barbaric killing of small and helpless children and babies must be forcefully rejected by any nation that values human rights. it is time to end this brutal civil war, defeat terrorists and allow refugees to return home. in facing our common challenges, we must also ensure that nato members meet their financial obligations and pay what they owe. many have not been doing that. the secretary general and i agreed that other member nations must satisfy their responsibility to contribute 2% of gdp. if other countries paid their fair share instead of relying on the united states to make up the difference, we will all be much

more secure and our partnership will be made that much stronger. the secretary general and i had a productive discussion about what more nato can do in the fight against terrorism. i complained about that a long time ago and they made a change, and now they do fight terrorism. i said it was obsolete. it is no longer obsolete. it is my hope that nato will take on an increased role in supporting our iraqi partners in their battle against isis. i'm also sending general mcmaster to afghanistan to find out how we can make progress alongside our afghan partners and nato allies. every generation strives to adopt the nato alliance, to meet the challenges of their times, and on my visit to brussels this spring, which i look very much

forward to, we will work together to do the same. we must not be trapped by the tired thinking so many have, but apply new solutions to face new circumstances, and that's all throughout the world. we're not here to stand on ceremony but to develop real strategies to achieve safety, security and peace. we are here to protect the freedom and prosperity of our citizens and to give them the future they so richly deserve. secretary general, i'm honored to have you here today and to reaffirm our commitment to this alliance and to the enduring values that we proudly -- and i mean very proudly -- share. thank you very much. thank you for being here. thank you. >> thank you, sir. thank you so much, sir, mr. president. we just had an excellent and very productive meeting, and it

is really an honor to meet you for the first time here in the white house. we agree that nato is a bedrock of security, both for europe and for the united states. two world wars and a cold war have taught us all that peace in europe is not only important for europeans but is also important for the prosperity and the security of north america. so a strong nato is good for europe, but a strong nato is also good for the united states. therefore, i welcome the very strong commitment of the united states to the security of europe. we see this commitment not only in words but also in deeds. over the past months thousands of u.s. troops have been

deploying to europe, a clear demonstration that america stands with allies to protect peace and defend our freedom. yesterday you announced the completion of the ratification of montenegro's membership in nato, another expression of your strong commitment to nato and the trans atlantic bond, and we thank you for that. in a more dangerous and more unpredictable world, it is important to have friends and allies, and in nato america has the best friends and the best allies in the world. together we represent half of the world's economic and military power. no other super power has ever had such a strategic advantage. this makes the united states stronger and safer.

we shaw that after the 9/11 attacks on the united states. that was the first time nato invoked our article 5, the collective defense rules. allies sent surveillance planes to help patrol american skies and we launched nato's biggest military operation ever in afghanistan. hundred of thousands of europeans and canadian soldiers have served shoulder-to-shoulder with american troops, more than 1,000 have paid the ultimate price. earlier today i laid a wreath at arlington national cemetery in tribute to the fallen. it was a deeply moving experience. we owe it to our servicemen and women to preserve the

hard-earned gains we have made together in afghanistan. we were reminded of the sacrifice just this week when a u.s. soldier was killed there fighting isil. our mission in afghanistan is a major contribution to the fight against international terrorism. nato plays a key role in many other ways also. all nato allies are part of the global coalition to counter isil, and nato provides direct support to the coalition with training for iraqi forces in their fight against terrorists and more intelligence sharing. and, you are right, we have established a new division for intelligence which enhances our ability to fight terrorism and working together in the alliance to fight terrorism in an even more effective way. but we agreed today, you and i,

that nato can and must do more in the global fight against terrorism. in the fight against terrorism training local forces is one of the best weapons we have. nato has the experience, the expertise and the staying power to make a real difference, and fighting terrorism will be an important topic when nato leaders meet in brussels in may. the other major topic will be fayer burd fairer burden sharing in our alliance, and we had a total discussion on this issue today. mr. president, i thank you for your attention to this issue. we are all seeing the effect of your strong focus on the importance of burden sharing in the alliance.

we agree allies need to redouble the efforts to meet the pledge we all made in 2014 to invest more in our alliance. it is about spending more on defense, it is about delivering the capabilities we need, and it is about contributing forces to nato missions and operations. this means cash capabilities and contributions. fair burden sharing has been my top priority since taking office. we have now turned a corner. in 2016 for the first time in many years we saw an increase in defense spending across european allies and canada, a real increase of 3.8% or $10 billion more for our defense. we are now working to keep up the momentum, including by

developing national plans, outlining how to make good on what we agreed in 2014. we know that we all need to contribute our fair share because we need to keep our nations safe in a more dangerous world. we discussed many different topics during our meeting today including the horrendous use of chemical weapons in syria. any use of chemical weapons is unacceptable, cannot go unanswered, and those responsible must be held accountable. so, mr. president, thank you once again. i look forward to working with you to keeping the alliance strong, and i look forward to welcoming you to brussels in may when heads of state meet there to address the challenges and the need to continue to adapt the alliance to a more

challenging security environment and to respond both to the need for fair burden sharing and stepping up our efforts to fight international terrorism. so thank you once again. >> thank you very much. great. thank you. so we'll have a couple of questions. jeff mason. >> reporter: thank you, mr. president. i would like to ask you about two topics, if i may. first, has your view of vladimir putin changed after what's happened in syria? and what does tis the united st prepared to do if he continues to support assad? on a separate question, have you made a deal after your chat last night with the president of china about china helping to ra rein in north korea, and is that one reason you decided not to label beijing as a currency manipulator. >> i'll be speaking to -- if you want to go ahead, go ahead. >> for the secretary general, do you believe nato should continue to bolster its presence along the alliance's eastern border

and are you confident you have president trump and the united states support for that? thank you. >> i'll be sweing with rex tillerson in a little while, he is calling in. i think he had a very successful meeting in russia. we'll see. we'll see the end result, which will be in a long period of time perhaps. but the end result is what's most important, not just talk. i think that based on everything i'm hearing, things went pretty well, maybe better than anticipated. it would be wonderful as we were discussing just a little while ago if nato and our country could get along with russia. right now we're not getting along with russia at all. we may be at an all-time low in terms of relationship with russia. this has bit for a long period of time, but we're going to see what happens. putin is the leader of russia. russia is a strong country. we're a very, very strong country. we're going to see how that all

works out. last night, separately i spoke with a man that i've gotten to know. i don't know putin but i do know this gentleman, i have spent a lot of time with him over the last two days, and he is the president of china. you were there, most of you were there, and it was quite an interesting period of time. president xi wants to do the right thing. we had a very good bonding. i think we had very good chemistry together. i think he wants to help us with north korea. we talked trade, we talked a lot of things, and i said, the way you're going to make a good trade deal is to help us with north korea. otherwise we're just going to go it alone, that will be all right, too, but going it alone means going it with lots of other nations. but i was very impressed with president xi, and i think he means well and i think he wants to help. we'll see whether or not he

does. >> do you feel like you have a deal with him? and if i could -- >> excuse me? >> reporter: do you feel you have a deal with him in terms of the currency manipulation and have your views on putin changed? >> we'll see. it would be a fantastic thing if we got along with putin and russia, and that could happen. it may not happen, it may be the opposite. i can only tell you what i would like to do. i would love to be able to get along with everybody. right now the world is a mess, but i think by the time we finish, i think it is going to be a lot better place to live. i can tell you that speaking for myself, by the time i'm finish it is going to be a lot better place to live in because right now it is nasty. >> nato is in the process of implementing the biggest reinforcement of our collective defense since the end of the cold war, and one element of that is to increase our military presence in the eastern part of the alliance.

we are now deploying four battle groups to the thrbaltic countri and poland and more u.s. forces in that part of europe, and this is the first time in many, many years we see an increase in the military presence of the united states in europe. so we are increasing our presence and we are also increasing the preparedness of forces so we can quickly reinforce if needed. we consider the presence we will have when the four battle groups are in place as sufficient given the current security situation in europe. but, of course, we will assess the situation and follow the developments very closely. the message from nato is that what we do is proportionate, it is defensive and we don't want a nuclear war, we don't want a new arms race. actually, we strongly believe there's no contradiction between a strong nato, a credible

deterrence on defense, and political dialogue with russia. actually, we believe that a precondition for a political dialogue with russia is that we are strong and that we are united, but based on that we can talk to russia because russia is our neighbor, is there to stay, so we have to find ways to manage our relationship with russia. i am absolutely certain that the united states supports this approach, partly because the united states is contributing with forces to enhance the presence in the eastern part of the alliance and also in the southeast of the alliance in romania, and the united states and the president has clearly expressed that they want dialogue, but based on unity and strength in the alliance. and the next question is from john soppel. >> reporter: thank you very much. secretary general, how long do you think it will take you to

persuade the other european countries to burden share and what are you going to do to persuade them? mr. president, could i ask you -- >> i'll answer that question. >> reporter: i'm here to help. >> reporter: and, mr. president, do you think it is conceivable, was it your instinct, was it possible that syrian forces could have launched that attack in idlib last week without the russians knowing? have you been disappointed, surprised by vladimir putin's reaction since then? thank you very much. >> i think it is certainly possible. i think it is probably unlikely, and i know they're doing investigations into that right now. i would like to think that they didn't know, but certainly they could have. they were there. so we'll find out. general mattis is looking into it with the entire pentagon group that does that kind of work. so it was very disappointing to see. it is disappointing no matter

who does it, but when you get into the gases, especially that form, it is vicious and violent and everybody in this room saw it all too many times over the last three or four days, young children dying, babies dying, fathers holding children in their arms that were dead, dead children. there can't be a worse sight and it shouldn't be allowed. that's a butcher. that's a butcher. so i felt we had to do something about it. i have absolutely no doubt we did the right thing, and it was very, very successfully done as you well know. thank you. >> on defense spending and burden sharing, that has been my top priority. i have raised it in all of my meetings in all capitals. i visited with prime ministers, presidents, minister of finance and also of course defense and foreign ministers. i expect, of course, all allies

to make good on what they decided back in 2014. and the very strong and clear message from president trump has been very helpful, so now we see that things are starting to move in the right direction. for the first time after many, many years of decline in defense spending, we now see an increase in defend spending across europe and in canada. so they have started to move in the right direction. 3.8% real increase in defense spending across europe and canada is a significant step in the right direction. it is not enough. we still have a long way to go, but at least they have turned a corner, the european allies have turned a corner. instead of reducing defense spending they've start to increase defense spending. then i think it is important to remember that this is something the europeans do because they know that this is in their own security interest. it is in their interest to invest more in european defense because the world has become more dangerous. many european allies, of course,

or all european allies reduced defense spending after the end of the cold war because then tensions went down. but if you are decreasing defense spending when tensions are going down, then you have to be able to increase defense spending when tensions are going up, and now they're going up. so we have still a long way to go, but i'm encouraged by the fact we have start to move in the right direction. last year there were five allies spending 2%. this year romania has declared they will reach 2%, next year lithuania will reach 2%. so we go from five to eight, which is at least going in the right direction. still have some work to do. >> and i did ask about all of the money that hasn't been paid over the years, will that money be coming back. we will be talking about that. we want to talk about that, too. anita cumara, where are you?

>> reporter: what is your reaction to the u.n. vote condemning [ inaudible ] syria overall? can you talk a little bit about the reaction to china? were you aware it was going to happen when you talked to him about that? how does that affect the relationship? >> we did talk last night. i think it is wonderful that they abstained, as you know. very few people expected that. no, i was not surprised that china did abstain. very, very few people thought that that was going to happen. so we're honored by the vote. that's the vote that should have taken place. >> reporter: mr. secretary general, could you talk about [ inaudible ] the impression in general due [ inaudible ] democratic elections, how do you counter moscow [ inaudible ]. >> the most important thing is to have a strong alliance, to stay united and be firm and predictable in our approach to

russia. that means we have to invest in our collective defense. that's exactly what we're doing. deploy more troops in the eastern part of the alliance, increase our forces and increase defense spending, and i welcome the strong message from president trump on the importance of increased defense spending. we have started to do this, so we are implementing the biggest reinforcement to our collective defense since the end of the cold war, providing credible deterrence. but at the same time we have to find ways to engage russia, to talk to russia, because russia will not go away. russia will be our biggest neighbor and we have to find ways to deal with them and to try to avoid a new cold war, a new arms race. that's exactly why i'm very much in favor of what we call the dual track approach to russia. and as a former norwegian politician, i have the experience to work with russians because of bordering russia. norway was able to develop a

pragmatic working relationship with russia in the cold war, cooperating with energy, on border issues, on environment, on fishery and also on military affairs, and that was not despite our membership in nato but it was because of our membership in nato. because nato provided the strength, the predictability, the platform for a small country to have political dialogue with russia. so i strongly believe the only way to deter russia is to be strong, but the only way to avoid a new cold war, avoid a new arms race and avoid increasing tensions is to continue to engage russia in the political dialogue and to make sure that what we do is defensive and proportionate in response to a more assertive russia. i yield the floor to diegos. >> reporter: thank you. i'm from norway. russia is our neighboring country. what do you think europe has to

fear from russia if this tension continues? >> say it? >> what do you think that european countries have to fear from russia if this tension continues? >> i cannot hear. >> reporter: i'll do it again. what do you think rush -- what do you think european countries have to fear from russia if this tension continues to escalate? for you, mr. secretary general, the attack in syria last week was warranted and it was also an attack on u.s. allies. do you think that this attack was warranted and do you see nato playing any supporting role in future actions in syria? >> well, i want to just start by saying hopefully they're going to have to fear nothing ultimately. right now there is a fear and there are problems, certainly problems. but ultimately i hope that there won't be a fear and there won't be problems and the world can get along, that would be the ideal situation. it is crazy what's going on. whether it is the middle east or you look at -- no matter whether

ukraine, wherever you look at, it has problems, so many problems. ultimately i believe that we are going to get rid of most of those problems and there won't be fear of anybody. that's the way it should be. we have a very big problem in north korea, and, as i said, i really think that jens is going to try very hard and has already started. a lot of the boats have been turned back, you saw that yesterday and today, they've been turned back. the vast amount of coal that comes out of china going to north korea, they've been turned back. it may be effective, may not be effective. if it is not effective, we will be effective, i can promise you that. thank you. >> nato has constantly condemned the use of chemical weapons in syria and the use of chemical weapons is horrendous and is a

clear violation of international law. any use of chemical weapons is unacceptable and cannot go unanswered. so those responsible must be held accountable. the strike against the air base in syria was a u.s. operation based on u.s. intelligence, but you have seen that within the alliance this has been something which has been met with a lot of understanding because nato allies do not accept that chemical weapons are used and, therefore, we also strongly support the effort of the fact-finding commission to try to find out actually what happened and to make sure that we don't see any use of chemical weapons in the future. >> thank you very much. thank you. thank you very much. >> president trump and the

secretary general of nato, jens stoltenberg, shaking hands after a news conference and a meeting in which they discussed, of course, various spenting levels of other members of nato and whether they're up to what the president would like to see since the u.s. has been carrying much more than its fair share of the weight. he did mention by the way, he sort of nudged and smiled at mr. stoltenberg saying, we have to talk about the money might have owed in the past as well. in any case, that's one of many geopolitical events touched on. let's bring in people to help break it down for us. christine is a senior fellow for the center for strategic and international studies. michael allen here from beacon global. he is also a cnbc contributor. welcome, everybody. christine, first you. what is significant to you about this news conference, simply the fact it happened, they appeared to be on relatively friendly terms or was there more? >> well, think there were a

couple of things that were significant. certainly i think the tone between the president and the secretary general was pretty positive. i think you heard president trump affirm his support for nato, affirm his support for what nato is trying to do, and those were some positive comments. he said he looked forward to the summit. but i think, you know, it was also interesting to me that, a, he basically signalled that nato is going to play a greater role fighting isis. it sound like maybe helping to train some of the local forces there. i also thought it was newsworthy that he indicated that national security adviser mcmaster is going to go to afghanistan to sort of assess the situation there. and, you know, i think it was interesting that president trump basically took what i would call a wait-and-see attitude in terms of what are the prospects for closer cooperation with president putin and also whether president xi is going to work with us to try to solve the north korea problem. >> yeah. he talked about how there were many other steps happening in

china to perhaps be tougher on the north koreans, including turning some coal boats back. those payments, of course, have been a huge issue as to whether china was still supporting the north korean ah. our kayla touche was in the press conference. some additional thoughts about of with what we saw? >> reporter: you heard the president, kelly, say he was wrong before, that nato is no longer obsolete, that he supports the mission and he is sending general mcmaster to afghanistan to get a lay of the land there. this is the same room that president trump and angela merkel, the chancellor of germany, talked about the importance of nato. she at that moment expressed her commitment to reaching that 2% goal. that was another topic of conversation here today. the secretary general of nato saying that he has been involved in thorough discussions with the president about getting the member states in nato to reach that goal set in 2014. he thanked the president for actually lighting a fire against some of these countries to reach that goal, but an interesting point he made was that spending

will go up organically as tensions around the world increase, that spending decreases when the world is a safer place and that it increases when those tensions flare. that goes directly against comments we heard from the administration, notely from secretary tillerson when he is trying to defend the president's desire to significantly cut the budget of the state department. he said the u.s. will be involved in fewer conflicts and that the world will be more secure, but that's a different statement than what we actually heard from the secretary general today. another interesting point that i would like to raise is the comments that president trump made about russia. he echoed what we heard from secretary tillerson this afternoon, saying relations with russia are at a low point, that he would like everybody to get along but that they are in a very dire position with russia right now. that is a very quick change of pace from a few weeks ago when the conversation about president trump and russia was one of coziness, was one that the administration was perhaps too close to russia and that there were investigations ongoing into

trump associates and whether they were in touch with russia during the campaign. how quickly the conversation changes there, but notably he said he is trying to make a deal with china on trade, that he hopes that they will have a peaceful resolution with north korea. a lot of headlines made in the east room today, kelly. >> kayla, thank you. appreciate you being there. kayla touche choining joining ue press conference. when he was asked about russia, he said we may be at an all-time low with russia, and considering the history of the two countries it says a lot. he said russia may be strong, but we are very, very wrong. separately, jens stoltenberg said he didn't want to see a new cold war or arms race, but talking about it, of course, it appears that's what -- i don't want to say that's what's on the table but that's where concerns are currently focused? >> i agree. i think president trump is starting to realize why we have

nearly irreconcilable differences with the russians. we have their activity and maybe, perhaps their com policity plicity in the chemical weapons attack in syria in the last week, their activity in ukraine and lately we're learning more about them working against us in places like libya and afghanistan. i think things are selttling don and he is coming to the realization that russian relations are very, very difficult, and it is not going to be solved with kind of a slap on the back with vladimir putin and an exchange of compliments. >> and the markets, of course, whenever there seems to be tensions with russia we're watching things like the ruble, the russian stock market on the north side of it, watching the cost of ensuring south korea against default. i wanted to bring you in here, of course, to talk about the broader ramifications for investors and for the markets about nature of this administration, the sort of dual conflicts they're currently

dealing with just 100 days in, jimmy? >> it's been kind of head spinning. if you felt more positive about the economy and markets make because you're worried about lower geopolitical tensions, then you see the president say, relations are as bad as they've ever been between us and the other major nuclear power, which means that the cuban missile crisis, that's reagan's evil empire speech. so our relations are worse than that. on the other hand, you have the president saying, listen, i would like a weaker dollar, i like interest rates low, maybe janet yellen saying -- i mean that's kind of your reflation trade. so the things you weren't worried about you need to worry about, and things you didn't worry about now you need to start worry. >> kristine, how would you describe now the state of play in the middle east? you know, we understand during the obama administration there was a strengthening of this kind of axis of iran and syria and russia, and if that is now being pushed back against by the u.s.

how does that change things or does it? >> well, i think the middle east has been a problem area for us for quite a while, but what i've seen so far under the new administration is an expansion, frankly, of our involvement. i mean not only have you seen an intensive indication of the fight against isis, wu i think is very good, frank replly, and of continuing a trend line from the obama administration, but you see the trump administration getting more involved in the yemen situation, pushing back at least rhetorically harder on iran, increasing a little bit our involvement military in syria. so at this rate i think you could potentially see the united states getting involved more heavily in the middle east, which, again, is not certainly what president trump talked about when he was a candidate. >> and, michael allen, if that's the case, that costs a lot of money, too. is that going to be taken away from other priorities here? >> well, i think it is inevitable here with a

republican congress and a republican president that we are in for a major defense increase, you know, sort of a reagan-styled build-up. but, look, i don't think washington is confronting the major economic issues. we can cut and even gut discretionary spending, but that's not really going to solve the major drivers of the debt crisis here in the united states, chiefly healthcare costs. so i still think we're sort of whistling past the grave yard on our larger fiscal situation, but we're going to go ahead and increase defense spending for sure i believe. >> you know, coming into this, you know, hawks here in washington were highly skeptical this administration would actually follow through on any promises, that he would have a reagan-style buildup. now what he's talking about with russia, maybe it is somewhat more likely. you know, maybe we can help finance the back taxes, of course, that trump wants to charge germany and france and the other nato allies. >> i know. good luck on all of that i

suppose. all right, everybody. thank you so much for joining us. christine wormuth, michael allen and jimmy. in after president trump earlier gave comments to the "wall street journal." we will have all of the details next. look at the ten-year note, by the way, now under 2.25%. the white house budget director will tell us how he is preparing for a popositive a potential government shut down later this month. all ahead on "the closing bell."

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welcome back. let's keep an eye on the ten-year treasury wreeld currently at 2.245%, falling to levels not seen since november. those are to the "wall street journal." steve liesman has the details. >> reporter: hey, kelly. before the report with the president with the "wall street journal," do a reality check which is to remind people presidents rarely if ever talk about the interest rate at the fed or the level of the dollar and then there's donald trump, who in an interview told the journal the u.s. dollar is getting too strong and it is hard to compete when the dollar is so strong, and of course the dollar immediately fell on the news, a quick decline. so far it is modest in total. the president also said he will not label china a currency manipulator in a report due this week reversing a significant campaign promise. president trump acknowledged what many have said for a long time, china has not recently been manipulating its currency.

he added labelling them would be a setback towards getting china's help to confront north korea. according to reuters, chuck schumer immediately responded saying it shows a, quote, lack of tough action on trade with china. finally, the president says he is undecided on redominating fed chair janet yellen. he said he likes and respects yellen and it is too early to city. let's remind people what the president said on cnbc about chair yellen in 2016. >> she is keeping them artificially low to get obama retired. watch what is going to happen afterwards. it is a very serious problem, and i think it is very political. i think she is very political, and to a certain extent i think she should be ashame willed of herself. >> reporter: the president said now and back in september he is a low interest rate guy, the ten-year yield falling about three base points in response to that. as kelly said, kelly, these are the lowest levels we have seen since just after the november election and falling it appears

right now. >> listen, let's hope it is not correlated with growth. thank you very much. the end of april marks the end of president trump's first 100 days in office and could also mark a government shut down if congress doesn't pass a spending bill to authorize funding for the federal government. john harwood sat down to gauge the orders. >> it is a transition from aggressive house member to cabinet member in a presidential administration, but shared in our interview he still has some freedom caucus in him. >> you used to be in the shut down caucus. you have a potential shut down at the end of april. are agencies preparing for the potential for shut down? >> i don't think we sent out the instructions yet. i don't see the need to, to be honest with you. so we've gone through the appropriations and said, look, if y'all can figure out a way to do this, let's do it together. shut down is never a desired end. >> what are the chances it happens? >> i think very low.

keep in mind, no one entity can shut the government down. it takes three to tango, the house, the senate and white house. if they can't agree, it happens that you have a lapse in funding. that's the term that the congressional research service uses for what the media calls a shut down. it happened 17 times between 1976 and 1994. those lamss in funding used to be fairly typical. >> do you think it is anti-that big a deal? >> i think it depend. i think the government -- if you measure in terms of the dollars out the door, about 83% of the government stays open in a government shut down. social security checks go out, military still exist, the fbi still chases bad guys. >> last thing. do you believe that government can prioritize payments on the debt? you're going to have to raise the debt limit later this year? >> i haven't seen anything that changes my opinion about prioritization. i understand treasury is working on stuff as to whether or not

they can do. year 'we're going to raise the debt ceiling but have to do it as part and parcel of a lot of things to try to resolve the debt problem. >> that meanings entitlement reform, right? >> it may. but there's a lot of entitlement reform other than howl how old you have to be to get social security. >> what is unusual about the last answer is that presidential administrations usually want a clean debt limit increase to make sure that it goes through. by adding constraints and conditions on that, seeking longer-term debt reduction mick mulvaney and the trump administration is raising the stakes and risks, kellie. >> good to know. great interview. thank you so much, john harwood in washington. caution, you may never think of stake in the same way again. the largest pork producer is entering the world of bioscience and it could one day save a human life. that's next. you always pay

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before the fate of the furious hits theaters april 14. xfinity. the future of awesome. >> welcome back. another news alert from president trump. this time on the airlines, phil lebeau, is it about united? >> everybody has an opinion about what happened last sunday night on united airlines, donald trump from an interview this afternoon, two pieces of news he made regarding his reaction to that incident. first one saying that airlines should not be prevented from overselling their flights. but he also says that airlines should have the upper limits of the compensation vouchers. they should be removed in compensating bumped passengers. remember, according to dot guidelines, it's 1,350. that's the upper limit for the airlines. what donald trump is saying, get rid of 1350. make it that the airline versus to keep going until they find people who are willing to accept being bump and removed from

particular flight, if it's a forced denied boarding. in other words, if you find somebody who raises their hands to $500, what's interesting, kelly, remember, donald trump used to run an airline, so he understands a little bit about this business and i am sure that trump airlines in its day oversold twice. everybody does. >> i forgot about that. i forgot about the airline. we got to go. 1350 is easier than the taxpayers paying i want the airline to pay. >> it's not the taxpayer. >> making sure, all right, thank you, phil. smithfield foods the largest food producer sventureing into new territory. it has been expanding its role for pig parts for medical uses. the end goal is to sell pig organs for transplants into humans and transplants into people could be big business in the future, our meg terrell will tell us how that may be.

i don't know, meg, is this already happening? is it a kind of the latest to get in on all this? >> reporter: this is a new area in the pharmaceutical world. the reason is there is a huge need for organs for transplantedation. you look at the argueens, it's about 118,000 people. i checked ten minutes ago, that number in the last three hours, increased by ten people. it's now 118,081 on the u.s. waiting list. there is a huge shortage, the people waiting at the end of each year has been rising over time. so companies are working on what is known as xeno transplantation, that's using organs from other species to transplant into human, because of advances in kinetic engineering, companies like united therapy putics are getting closer. we actually talked with united therapeutics about this in 2015. here's how she explained why they got into this. >> i got inspired in my field

base because my grandmother needed a heart valve replacement. they used a pig's valve. i asked me parents why a 'ig? they say it's the same size as a human heart valve. as i grew up, i learned that all of the pig's major organs by coincidence of nature the same size and function as the human organ. >> and because of the size of the knee here, he is saying the market could be about $10 billion a year. they are getting close to starting human trials, kelly. >> if it helps people on that list, then, it's the greatest thing you can tell us. i still will notally the abo th bacon. 10,000, that's how many items are discounted by wal-mart in a new plan. we will break down the benefits for consumers and shareholders when we come right back. odel, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't.

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>> seven months ago, wal-mart takes $3 billion from jet.com to bolster their battle against amazon. the fruits of that deal are seen in a plant that could be a boom for customers in sales, courtney reagan has more. >> reporter: wal-mart's purchase of jet, the founder was the most valuable asset. now he is running wal-mart's

asset. he is introducing strategies to the world's largest retailers, starting april 19ing, wal-mart can pick up a discount the customers buy online by pick up in store. 10,000 products at first, more than a million by the end of june. the discount will vary, depending on the weight and size, examples suggest that discount falls around 4%. for this carseat, it's 5% for $7.40 if you pick up in store. mark lori says the discount is meant to be the discount of the cost of the items. some could buy 10 to 1550% of the delivery costs. wal-mart wouldn't disclose the exact profit margins, generally, it's cheaper to ship load them from the distribution center to the store than to have the shoppers get it delivered to the shoppers that last mile in their homes. so if you help wal-mart save the money on that last mile, they're going to help you get that cost savings in your purchase price.

plus, there is always the chance you will pick up more when you actually get to the store. >> i know, you got to go, still there are online items you pick up in the store. it's a little, i don't want to say confusing. >> reporter: it will show up. i know we have to go, it will show up if it's eligible for you. they can't stock all of them in the store. if you want it, they are trying to get it to you as cheapest and they save you money. >> "fast money" starts right now. >> breaking news, two big stories out of washington, d.c., moving the markets today, president trump just arriwrappip a press conference hours after rex tillerson's meeting with russian president vladimir putin. plus trump making surprising comments about the strong dollar, interest rates and jan etc. yellen, who he says is not toast. we have full team coverage, cnbc kayla